Yahoo Finance BP demands guarantee that Britain’s biggest freeport is not corrupt
Energy giants BP and Equinor have demanded Britain’s biggest freeport guarantee that it is not corrupt following a Labour “smear” campaign.
The two companies are understood to have sought legal warranties by chiefs running the vast port in Teesworks, north-east England, as part of a net zero project.
It follows accusations by former Labour frontbencher Andy McDonald that there had been “industrial-scale corruption” at the site.
Ben Houchen, Conservative mayor for Tees Valley, said the allegations were untrue, and amounted to a Labour “smear” campaign.
He called Mr McDonald, MP for Middlesbrough, a “coward” for making the remarks in parliament, where they are protected against being sued for defamation.
The allegations are understood to have been of sufficient concern for BP and Equinor to ask for clauses to be inserted in commercial contracts.
A joint venture between the two companies was selected among the first projects in the Government’s rollout of the first industrial carbon capture “clusters” at the end of March.
Teesworks directors are understood to have pledged that assets at the site had not been acquired because of an “unacceptable act”.
“Nor have they hidden or dissimulated, and will not hide or dissimulate the nature origin, location, disposition, or ownership of assets, rights or values,” the warranties are also believed to state.
The unusual legal commitments leave signatories exposed to paying out damages if the position set out in the warranty was not true.
BP, Equinor declined to comment. A spokesman for Teesworks said that they could not comment on commercial arrangements.
In April, Penny Mordaunt, the Commons leader, said she would write to the relevant secretary of state following accusations made in parliament by Mr McDonald.
Citing a Private Eye article, Mr McDonald accused developers Chris Musgrave and Martin Corney of financially benefiting from the site. The Labour MP claimed Mr Houchen had allowed Mr Musgrave and Mr Corney to pay just £100 for land that he alleged was worth £100m.
Teesworks is a joint venture between South Tees Development Corporation, overseen by the Tees Valley Combined Authority, and Mr Musgrave and Mr Corney.
Mr McDonald asked Ms Mordaunt “what plans the Government has for a full investigation into this industrial-scale corruption”.
Responding to the allegations at the time Mr Houchen said: “I would absolutely require Andy to come out into the public, outside of Parliament, make those same statements – because he won't do that, because he knows if he does he will be sued for defamation, for libel and he will lose.”
The tie-up with BP and Equinor is one of a number of industrial projects being built at Teesworks, a 4,500-acre site near Redcar that was previously home to one of the UK’s biggest steel plants.
The redevelopment of the site has been a key plank of Mr Houchen’s mayoralty. A close ally of former prime minister Boris Johnson, Mr Houchen has trounced Labour at the ballot box – most recently gaining 73pc of the vote in the May 2021 mayoral election – albeit with a low turnout of only 34pc.
Other assets at Teesworks include Redcar Bulk Terminal, the deepest port on the east coast of England and Northumbrian Water’s treatment facility. It surrounds one of the UK's biggest ports, PD Ports.
Work is also under way to build an offshore wind turbine production plant at a cost of £300m.
It is hoped that carbon capture facilities at Teeswork will be able to store up to 10 million tonnes of CO2 each year – equivalent to the annual energy use of more than three million homes.
